What Is an Insider Threat? A Complete Guide

Learn how insider threats work and what your security team can do to detect them before they cause damage.

Malicious insider attacks cost organizations $4.99 million on average. That’s higher than phishing, social engineering, or stolen credentials as initial attack vectors (IBM Cost of a Data Breach Report 2025).

The challenge? These threats come from people who already have access. Employees, contractors, and partners with legitimate credentials don’t need to hack their way in. They’re already inside.

And here’s what makes this worse: one in three attacks now use valid credentials as the initial access vector (IBM X-Force Threat Intelligence Index 2025). Many of those credentials were stolen without the employee ever knowing.

This guide covers what insider threats are, the five types you need to watch for, real examples, and how to detect them before they cause significant damage.

What Is an Insider Threat?

Most security tools focus on keeping attackers out. Firewalls, intrusion detection, perimeter defenses. But what happens when the threat is already inside?

Insider threats include stealing intellectual property, sabotaging systems, leaking sensitive data, or facilitating external attacks. The common thread? The person responsible already has authorized access.

This makes insider threats fundamentally different from external attacks. You can’t block them at the firewall. They don’t need to exploit vulnerabilities to get in. They’re already there, and their activity often looks like normal work. NIST’s definition emphasizes that insiders have “authorized access to organizational assets” and can cause harm through “fraud, theft, sabotage, or competitive advantage.”

Understanding the different types helps you build appropriate defenses for each. What works against a malicious insider won’t stop a compromised credential attack.

Types of Insider Threats

Insider threats fall into five categories, each with different motivations and detection requirements.

Malicious Insiders

These individuals intentionally exploit their access to harm the organization. Their motives vary: financial gain drives most cases, but revenge, ideology, and corporate espionage also play roles. Malicious insider attacks cost $4.99 million on average and take 260 days to identify and contain (IBM Cost of a Data Breach Report 2025). For more on financial impact and real cases, see our guide on insider data breaches.

Malicious insiders are particularly dangerous because they understand your security controls. They know where sensitive data lives. They know which activities get monitored and which don’t.

Common malicious insider activities include stealing customer data or intellectual property, sabotaging systems before leaving the company, selling access to external threat actors, and conducting corporate espionage for competitors.

Negligent Insiders

The most common category. These employees don’t intend to cause damage but create security risks through carelessness, poor security hygiene, or lack of awareness. Though less costly per incident than malicious attacks, negligent insider breaches still cost on average $4.35 million (IBM Cost of a Data Breach Report 2025).

Common examples include falling for phishing attacks, using weak or reused passwords, sharing sensitive information without authorization, misconfiguring systems or cloud storage, and sending data to personal email accounts.

One negligent mistake can expose millions of records. The 2020 Twitter breach started when employees working from home fell for a social engineering attack disguised as an IT request.

Compromised Insiders

This category is growing fastest. External attackers obtain employee credentials through phishing, infostealer malware, or purchasing them on dark web marketplaces.

IBM X-Force reports that one in three attacks now use valid credentials as the initial access vector. Infostealer delivery increased 84% via phishing in 2024. These malware variants steal credentials, cookies, and autofill data, giving attackers everything they need to impersonate employees.

Compromised insiders are especially difficult to detect because their “malicious” activity appears normal. The credentials are real. The access patterns may look routine. Only external threat intelligence reveals the compromise.

Third-Party Insiders

Contractors, vendors, and business partners often have privileged access with less oversight than employees. They may have weaker security practices. When they get breached, your data goes with them.

The Target breach in 2013 started with a compromised HVAC vendor. Attackers used the vendor’s credentials to access Target’s network, eventually stealing 40 million credit card numbers.

Third-party risk management requires the same attention as internal employee monitoring, but many organizations treat vendor access as an afterthought.

Collusive Threats

Insiders who partner with external attackers for coordinated attacks. An employee might provide credentials, disable security controls, or plant malware in exchange for payment.

These threats combine insider access with external attack capabilities. They’re harder to detect because the insider knows what your security tools monitor and can help attackers avoid triggering alerts.

Knowing the threat types helps you recognize them. But how do you spot an insider threat in practice?

Insider Threat Indicators

Insider threats leave traces. The warning signs fall into three categories:

• Behavioral indicators like unusual access patterns, expressing discontent, policy violations, and financial stress often appear weeks before technical indicators
• Technical indicators include excessive data downloads, privilege escalation attempts, login anomalies, and security tool tampering
• External indicators such as employee credentials on dark web marketplaces or infostealer logs reveal compromised insiders that internal monitoring misses

For a complete breakdown of what to watch for across all three categories, see our detailed guide on insider threat indicators.

Real-World Insider Threat Examples

Twitter 2020: Social Engineering Creates Negligent Insiders

In July 2020, attackers compromised Twitter’s internal systems by targeting employees with phone-based social engineering. The attackers posed as IT support, convincing employees working from home to enter credentials on a phishing site.

Once inside, the attackers used Twitter’s internal tools to reset passwords and disable two-factor authentication on high-profile accounts including Barack Obama, Joe Biden, Elon Musk, and Apple. They posted cryptocurrency scams that netted over $100,000 in Bitcoin.

Lesson: Remote work expanded the attack surface. Employees who would have questioned an in-person request fell for phone-based social engineering. The attackers didn’t need to hack anything. They just needed one employee to hand over credentials.

Capital One 2019: Third-Party Access Gone Wrong

A former Amazon Web Services employee exploited a misconfigured web application firewall to access Capital One’s cloud environment. She obtained credentials for an IAM role, then used those credentials to list and extract data from over 100 million customer accounts.

The breach exposed names, addresses, credit scores, and Social Security numbers. Capital One paid $80 million in regulatory fines and $190 million in a class-action settlement.

Lesson: Third-party access requires the same monitoring as internal access. The attacker had insider knowledge of AWS infrastructure from her previous employment. Misconfigured cloud resources combined with that knowledge created the breach.

Tesla 2020: Malicious Insider Recruitment

A Russian national attempted to recruit a Tesla employee to install malware on the company’s network. The plan: deploy ransomware, exfiltrate data, and extort Tesla for millions. The insider would receive $1 million for their cooperation.

The employee reported the recruitment attempt to Tesla, who contacted the FBI. The would-be attacker was arrested.

Lesson: Collusive threats are real. External attackers actively recruit insiders. This attack failed because the employee was loyal and knew exactly how to report it. Clear reporting channels matter.

Anthem 2015: Compromised Credentials at Scale

Attackers used spear-phishing emails to steal credentials from Anthem employees. Once inside, they moved laterally through the network for weeks, eventually accessing a database containing 78.8 million patient records.

The breach exposed names, Social Security numbers, medical IDs, addresses, and employment information. Anthem paid $115 million in a class-action settlement and $16 million to the HHS Office for Civil Rights.

Lesson: Compromised credentials enabled this entire attack. The attackers didn’t exploit technical vulnerabilities. They stole legitimate credentials and used them to access systems normally. External credential monitoring could have detected the initial compromise before lateral movement began.

Cash App 2022: Departing Employee Data Theft

A former Cash App employee downloaded reports containing customer data after leaving the company. The reports included full names, brokerage account numbers, portfolio values, and stock trading activity for 8.2 million customers.

Block (Cash App’s parent company) discovered the breach months after the employee’s departure. The delay came from not immediately revoking access when the employee left.

Lesson: Departing employees require immediate access revocation and a review of their recent data access. This breach was entirely preventable with proper offboarding procedures. The employee accessed data they no longer had business need for, but retained access because of process failures.

These examples show the range of insider threats. Detection requires multiple approaches working together.

How to Detect Insider Threats

No single tool catches everything. Effective detection combines internal monitoring with external intelligence.

Internal monitoring tools like UEBA, DLP, SIEM, and EDR establish baselines, track data movement, correlate events, and provide endpoint visibility. They catch behavioral and technical indicators as they happen.

External threat intelligence reveals what internal tools miss. Compromised credential monitoring alerts you when employee credentials appear in breaches. Infostealer log analysis reveals active malware infections. Threat actor tracking provides early warning when criminals advertise access to your network or post your data on dark web marketplaces.

The combination matters. Internal monitoring catches known patterns. External intelligence catches compromised insiders before any internal indicator surfaces.

Integration is critical. When external intelligence reveals compromised credentials, your internal monitoring should immediately increase scrutiny on affected accounts. When UEBA detects anomalous behavior, check whether those credentials have appeared in recent breaches. Neither approach works as well in isolation.

Prioritize based on risk. Not every alert deserves the same response. Anomalous behavior from an admin account accessing financial systems matters more than unusual login times from a marketing intern. Build risk scoring into your detection workflow so investigators focus on the highest-impact threats first.

Detection alone doesn’t stop insider threats though. You need a response plan.

How to Respond to Insider Threats

Responding to insider threats requires coordination across security, HR, legal, and management.

Preserve evidence first. Before taking any containment action, ensure you’re capturing logs, network traffic, and endpoint data. You’ll need this for investigation and potential legal proceedings.

Assess the scope. What systems did the user access? What data could they have touched? Is the threat ongoing or historical? This determines your containment approach.

Coordinate across teams. HR handles employment implications. Legal ensures compliance with regulations. Management makes decisions about disclosure and remediation. Establish this coordination before incidents occur.

Contain appropriately. Options range from increased monitoring to immediate access revocation. Match your response to threat severity and evidence strength. Premature action can alert the insider and destroy evidence.

Document everything. Your incident response process should document every step for legal protection and future improvement. What indicators triggered the investigation? What did you find? What actions did you take?

Conduct post-incident reviews. After resolving an insider threat, analyze what happened. How did the insider gain access? What controls failed? How long did the threat go undetected? Use these findings to strengthen your defenses. Every incident is a learning opportunity that can prevent the next one.

Incident response handles threats you’ve found. Prevention stops them from happening.

How to Prevent Insider Threats

Insider threat prevention requires multiple layers. No single control stops all insider threat types, so effective programs combine technical controls, monitoring, training, and clear policies.

Access Controls

Implement least privilege. Employees should have only the access their job requires. This limits the blast radius when accounts are compromised. Review permissions quarterly and revoke access that’s no longer needed. Role changes should trigger immediate access reviews.

Use strong authentication. Multi-factor authentication prevents simple credential theft. Hardware security keys provide stronger protection than SMS or authenticator apps. But remember: session tokens stolen by infostealers can bypass MFA entirely, which is why external credential monitoring matters.

Segment your network. Limit lateral movement so compromised accounts can’t access everything. Critical systems should require additional authentication. Microsegmentation prevents attackers from pivoting from a compromised workstation to sensitive databases.

Control privileged access. Admin accounts need extra protection. Use privileged access management (PAM) solutions to vault credentials, enforce just-in-time access, and record privileged sessions. Never let admins use privileged accounts for daily work.

Monitoring and Detection

Deploy user behavior analytics. UEBA tools establish baselines for normal behavior and alert on anomalies. When an accountant suddenly accesses engineering systems at 3 AM or downloads 10x their normal data volume, you’ll know immediately.

Implement data loss prevention. DLP monitors and controls sensitive data movement through email, cloud storage, removable media, and printing. Configure policies to block or alert on sensitive data leaving approved channels. Pay special attention to departing employees.

Monitor for compromised credentials. External threat intelligence surfaces exposed employee credentials before attackers exploit them. Dark web monitoring catches compromised insiders that internal monitoring misses entirely. When credentials appear in breach databases, you can force password resets before attackers use them.

Log everything relevant. Centralize logs from identity systems, file servers, cloud applications, and endpoints. You can’t detect what you don’t log, and you can’t investigate what you didn’t preserve. Ensure logs are tamper-resistant and retained long enough to support investigations.

Training and Culture

Conduct regular security training. Educate employees about phishing, social engineering, and data handling requirements. Negligent insiders cause fewer incidents when they understand the risks. Make training specific to roles: finance teams face different threats than engineers.

Run phishing simulations. Regular tests identify employees who need additional training. Track metrics over time to measure program effectiveness. Don’t punish failures; use them as teaching moments.

Create reporting mechanisms. Anonymous channels for reporting suspicious behavior encourage employees to speak up without fear of retaliation. The Tesla case succeeded because the employee knew how to report the recruitment attempt. Make reporting easy and acknowledge every report.

Manage departing employees carefully. The risk window opens when resignation is announced. Increase monitoring immediately. Disable access on the last day, not after. Audit their data access in the weeks before departure. Conduct exit interviews reinforcing confidentiality obligations and reminding them of legal consequences for data theft.

Vendor and Third-Party Controls

Third-party insiders need the same monitoring as employees, but you typically have less visibility into their activity.

Assess vendor security posture. Before granting access, evaluate their security practices. Do they encrypt data? How do they handle credentials? What’s their incident response capability? Third-party breaches often start with weak vendor security.

Limit vendor access scope. Grant only the minimum access needed for the specific project or service. Time-bound access whenever possible. Require vendors to use your identity systems rather than shared credentials.

Monitor vendor activity. Apply the same behavioral analytics to vendor accounts as employee accounts. Unusual access patterns from vendor accounts deserve immediate investigation.

Include security requirements in contracts. Your vendor agreements should specify security controls, breach notification timelines, and audit rights. Require vendors to maintain cyber insurance and demonstrate compliance with relevant standards. Include termination clauses for security failures.

Conduct regular vendor reviews. Security postures change. A vendor that passed your initial assessment may have weakened controls a year later. Annual reviews should verify that vendors still meet your requirements. Request updated SOC 2 reports and penetration test results.

Plan for vendor offboarding. When vendor relationships end, revoke access immediately. Ensure they’ve deleted your data per contractual requirements. Document the offboarding process for compliance purposes. Former vendors with lingering access create the same risks as former employees.

Building an Insider Threat Program

Ad hoc responses to insider threats create inconsistency and legal liability. Formal programs coordinate detection, investigation, and response across the organization.

Program Structure

Executive sponsorship matters. Insider threat programs touch HR, legal, IT, security, and business units. Without executive backing, turf battles undermine effectiveness. The program owner needs authority to require cooperation across departments.

Cross-functional teams bring different perspectives. Security understands technical indicators. HR has access to employment records, performance history, and prior complaints. Legal ensures investigations are defensible. Management makes decisions about employment actions. Each function has a role.

Define clear roles and responsibilities. Who monitors for indicators? Who decides when to escalate? Who conducts investigations? Who makes termination decisions? Document these roles before incidents occur.

Policies and Procedures

Acceptable use policies set boundaries. Employees need to know what’s allowed and what’s not. Cover data handling, personal device use, cloud storage, and remote access. Make policies specific enough to be enforceable.

Investigation procedures ensure consistency. Document how investigations are triggered, who’s involved, what evidence is collected, and how findings are documented. Inconsistent investigations create legal exposure and miss threats.

Privacy considerations constrain monitoring. Balance security needs against employee privacy expectations. Consult legal counsel on monitoring practices, especially for remote workers or employees in jurisdictions with strong privacy laws.

Continuous Improvement

Measure program effectiveness. Track metrics like time to detect, investigation outcomes, and false positive rates. Measure against baselines and improve over time.

Conduct tabletop exercises. Walk through insider threat scenarios with the cross-functional team. Identify gaps in procedures before real incidents expose them.

Stay current on threats. Insider threat tactics evolve. Infostealer malware barely existed five years ago; now it’s a primary credential theft vector. Programs that don’t adapt become ineffective.

Key Metrics to Track

Effective insider threat programs measure specific outcomes. Track these metrics quarterly:

Detection metrics show how well you’re finding threats. Mean time to detect (MTTD) measures how long threats go unnoticed. Alert volume and false positive rates indicate whether your tools are calibrated correctly. Too many false positives lead to alert fatigue; too few alerts suggest blind spots.

Investigation metrics reveal process efficiency. Track the number of investigations opened, average investigation duration, and resolution outcomes. Long investigations drain resources. Investigations that consistently find nothing indicate poor triage criteria.

Prevention metrics demonstrate program impact. Monitor policy violation rates, security training completion, and phishing simulation results. Track access review completion rates and time to revoke access for departing employees. These leading indicators predict future incidents.

Business impact metrics connect security to outcomes executives care about. Track incidents prevented, data exposure avoided, and regulatory penalties prevented. Calculate the cost savings from early detection versus late discovery.

Implementation Timeline

Building an insider threat program takes time. Most organizations follow this progression:

Months 1-3: Foundation. Secure executive sponsorship and define program scope. Identify cross-functional team members. Conduct initial risk assessment to prioritize threats. Review existing policies and identify gaps.

Months 4-6: Core capabilities. Deploy or configure monitoring tools. Establish baseline behaviors. Create investigation procedures. Train the team on detection and response.

Months 7-9: Integration. Connect internal monitoring with external threat intelligence. Integrate HR processes for onboarding and offboarding. Conduct first tabletop exercise. Refine detection rules based on false positive rates.

Months 10-12: Optimization. Measure program effectiveness against baseline metrics. Address gaps identified in exercises. Expand coverage to third-party access. Report results to executive sponsors.

Programs that skip steps often fail. Deploying monitoring tools without investigation procedures creates alerts no one acts on. Training without policies gives employees nothing to follow. Each component supports the others.

Conclusion

Insider threats aren’t just disgruntled employees stealing data. Compromised credentials, employee negligence, and third-party access create risks that traditional security tools miss.

The numbers tell the story. Malicious insider attacks cost $4.99 million on average. One in three attacks use valid credentials. Infostealer delivery increased 84% in 2024. These trends point to compromised insiders as the fastest-growing threat category.

Effective defense requires internal monitoring for behavioral and technical indicators. External intelligence catches compromised credentials before attackers use them. Organizations that catch insider threats early look for warning signs in places others ignore.

Ready to see what external threats you’re missing? Check your organization’s dark web exposure to find compromised credentials before attackers use them.